Troy Proctor’s project hits $4M snag

A proposal to convert the old Proctor’s Theater in downtown Troy, N.Y. into a new City Hall has hit a big roadblock: a $4 million state grant can’t be used to subsidize the work.

Empire State Development Corp., the state agency administering the grant under the Restore NY program, told city officials this week the money can’t be used to renovate properties for municipal uses.

“The purpose of the Restore NY Communities Initiative funding is to generate new tax base and promote private sector business,” said Jola Szubielski, an agency spokeswoman. “ESD would prefer the funds be used as stated in the city’s application – for private development.”

That would appear to drive up the cost of a proposal by Columbia Development Cos. to renovate space around the dilapidated theater on Fourth Street, lease it to city government for a new City Hall, and mothball the performance space itself.

Columbia Development had included the Restore NY grant in its cost estimate to the city. Without the grant, the renovation cost would be $10.6 million.

“It certainly doesn’t make the possibility [of a new City Hall there] very likely,” Mayor Harry Tutunjian said. “The developer was counting on using that funding to do a lot of the work in that building.”

Tutunjian doesn’t support the proposal, arguing it’s more affordable to keep City Hall in its temporary, leased offices on Sixth Avenue and make improvements to the building there.

City Council President Clem Campana, who favors renovating Proctor’s for a City Hall, said he needs more information about the use of Restore NY funding.

“Our contention is this won’t be a municipal project,” Campana said. “It will be privately developed, and then we lease it for several years and then potentially purchase it down the road.”

Szubielski, the spokeswoman for Empire State Development, said leasing the property for a City Hall would still be considered a municipal use under the Restore NY guidelines.

Proctors is owned by Rensselaer Polytechnic Institute.

Neither Claude Rounds, the college’s vice president for administration, nor Columbia Development President Joseph Nicolla were immediately available for comment.

Using the old Proctor’s for a new City Hall wasn’t envisioned last year when Columbia Development, Rensselaer and the city announced the $4 million grant and unveiled plans for the dilapidated theater.

Under the original concept, Columbia was going to preserve the facade but demolish the theater and replace it with 100,000 square feet of office and retail space. The company was also going to redevelop an adjacent vacant property, the Chasan building.

But that proposal was frowned upon by the state Office of Parks, Recreation and Historic Preservation, which said tearing down part of the theater to build new offices would have an “irreversible adverse impact.”

The state told Columbia Development it must come up with alternative plans to “avoid or mitigate” any demolition.

The alternative was to convert part of the building into a new City Hall.